Bill Ackman just released a letter to his investors about Valeant, and it is a sight to behold

Hedge fund billionaire Bill Ackman just released a letter to
investors regarding his position in Valeant Pharmaceuticals, and
it is a sight to behold.

"We continue to believe that the value of the underlying
business franchises that comprise Valeant are worth multiples of
the current market price," he wrote.

This as the stock plunged over 40% on Tuesday's trading
day.

What's really odd about the letter isn't Ackman's continued
confidence — he has already stuck by Valeant through accusations
of malfeasance from a short seller and government scrutiny. He
even tried to help Valeant acquire Allergan Pharmaceuticals in
2014.

Instead, what is odd is that it seems that Ackman is done with
Valeant's management, most specifically CEO Michael Pearson.

"In particular," Ackman said, "management shocked the market with
revenue and earnings guidance for the next twelve months (Q2 2016
to Q1 2017) which does not appear to foot with continued
favorable prescription trends and management's commentary on the
call about the strength of the underlying businesses."

It sounds as if he doesn't think management understands
where Valeant's business is going.

Here's the full letter:

Dear Pershing Square Investor,

Today, Valeant reported preliminary unaudited earnings for
Q4, updated guidance for Q1, full year 2016 and the next
twelve months. In particular, management shocked the market with
revenue and earnings guidance for the next twelve months (Q2 2016
to Q1 2017) which does not appear to foot with continued
favorable prescription trends and management's commentary on the
call about the strength of the underlying businesses.
Furthermore, the company's 10-K has been delayed requiring the
company seek a waiver under its credit agreement. While we
believe that it is highly likely that the banks will provide a
waiver, uncertainty about the potential for a default creates
enormous investor fear.

The above factors have caused investors to lose total confidence
in the company as reflected by the current 44% decline in
Valeant's stock price.

Last week, Steve Fraidin, our Vice Chairman, joined the board. We
are going to take a much more proactive role at the company to
protect and maximize the value of our investment. We continue to
believe that the value of the underlying business franchises that
comprise Valeant are worth multiples of the current market price.
Getting to those values, however, will require restoration of
shareholder confidence in the management and governance of the
company.

We will do our best to keep you promptly informed subject to any
limitations that we have now that we have recently become
insiders at the company.

Please feel free to contact the investor relations team or me if
you have further questions.

Sincerely,

Bill

And for more on Valeant, check out Business Insider's
Linette Lopez and Josh Barro on their podcast, Hard
Pass: